Prosperity Without Pollution; J. Semmens

THEFREEMAN IDEASON LIBERTY Prosperity Without Pollution by John Semmens I recently had the opportunity to partici pate in a World Future Society" debate" on whether we could reduce pollution with out also reducing our economic wellbeing. Mainstream thinking asserts that we must sacrifice at least some of our prosperity in order to protect the environment. One pan elist in the World Future Society debate insisted that we must drastically reduce population, live in houses made of mud and straw (apparently oblivious to the fate of one of the "Three Little Pigs" who tried this), and ride bicycles to work. Fortunately, this mainstream thinking is wrong. We can have both a growing econ omy and an improving environment. In fact, it seems likely that a growing economy may well provide the very means needed to improve the environment. "Sacrifice" may not only be unnecessary, it may even be counterproductive. On balance, there is good reason to be optimistic about the' 'fate of the planet. "

If we are to overcome the institutionalized pessimism of the mainstream environmen talist creed, we must first dispel its errone ous premises. Erroneous premise #1: Natural is better than artificial. Natural is the survival of the fittest. The natural condition is for the weak, the lame, the sick to be mercilessly exterminated by predators and climate. Dying of old age is Mr. Semmens is an economist with LaissezFaire Institute in Chandler, Arizona. not natural. In a state of nature, most deaths are violent, painful, or agonizing. The most common modes of demise are being killed and eaten or starving to death. The natural world is not the "playland" depicted by Disney cartoons. It is the constant struggle for survival perceived by Charles Darwin. Some 99 percent of extinctions that have occurred on this planet occurred before human beings existed. The environment does not preserve species or habitat. Left alone, the environment is ruled by an undi luted principle of "might-makes-right. "

Civilization is artificial. This creation of the human species has modifiedthe "might makes-right" rule of nature. The artificial institution of law helps to channel human predatory instincts to more humane pur poses. One does not have to watch too many nature documentaries before it becomes clear that theft, assault, rape, and murder are common behaviors in the animal king dom. Nature has no law respecting prop erty. The strong dispossess the weak. Aban donment, exile, and death are the fate of those who cannot compete in the Darwinian struggle. Technology is artificial. The inquiring minds of the human species have discovered or created the means to enable the survival of the weak, the lame, and the sick. Medi cine has lowered the mortality rates from disease, accident, and violence. Improved production methods have made starvation a relatively rare cause of death in the Western world. Devices like eyeglasses and wheel chairs have helped to offset disabilities that 168 would imperil survival in a state of nature.

As a result, we have the opportunity to lead lives that are less violent, painful, and pre carious than would be natural. "Environmentalism" itself is an artifact of civilization. The abundance generated by our technologically advanced civilization allows people to contemplate more than just survival. Creatures living in a natural state of subsistence cannot afford the luxury of refraining from unbridled exploitation of the environment. For example, without abun dance, wilderness is a barrier for humans to overcome or avoid. With abundance, wil derness can be perceived as worthy of being preserved. Erroneous premise #2: Resources are finite. The very concept of what constitutes a resource is a creation of the human mind. No "thing" is a resource by nature's decree. All "resources" are "man-made." That is, it is only the application of human valuation to objects that make them resources. If humans place no value on an object it is not going to be called a resource. Its supply in a state of nature will exceed the demand for it. An example of a "thing" that has under gone a transition from a non-resource to a highly valued resource is crude oil. At one time, in the not too distant past, oil was seen mainly as a blight on agriculture. The few places where oil bubbled to the surface posed hazards to livestock and crops. How ever, during the nineteenth century, human ingenuity discovered a means of converting this substance to useful purposes.

Even such a highly prized substance as crude oil is not valued for itself. Rather, it is valued for the service it can perform in meeting human wants. If some other sub stance can be found or made that offers better or cheaper service, it will supplant crude oil, just as crude oil supplanted whale oil in the nineteenth century. That some other substance will eventually be found or made seems highly probable. The high prices of scarce resources stimulate the search for better or cheaper alternatives for meeting the same human wants. So, in the 169 final analysis, it is not the "finiteness" of any substance that is critical. The critical factor is the scope of the human imagina tion. This scope seems to be getting broader. The accelerating pace of technological ad vancement should give us confidence that, barring the implementation of oppressive government meddling, we are not likely to run short of intellectual resources in the foreseeable future.

Erroneous premise #3: Population growth is a problem. One participant in the World Future So ciety debate showed a graph of world pop ulation growth that he described as "scary. " Frankly, I would find a graph showing a comparable plunge in world pop ulation far more scary. The growth in pop ulation that has characterized the modern era is due primarily to lower mortality rates. Fewer people are dying at young ages. More are living longer lives. For most, the pros pect of living a longer life would not be considered a fearful event. Fear is more aptly associated with. an untimely early demise. The fear of population growth seems to be driven by the notion that eventually there will be too many people for the planet to support. Such a fear is grossly exaggerated. Most of those familiar with the "carrying capacity" concept agree that given the cur rent level of technology the sustainable human population figure is in the 30 to 40 billion range. Inasmuch as the present pop ulation is under 6 billion and no credible forecast projects a figureeven close to the 30 billion mark for the next few centuries, the planet seems far from overloaded. Besides, as the mortality rates have fallen in the industrialized portions of the globe, so too have the birth rates. Once parents are more assured that their children will survive to adulthood, the need to produce enough offspringto compensate for a highdeath rate is alleviated. Obviously, human reproduc tion is influenced by factors more compli cated than pure sexual instinct.

It is not population, per se, that could pose a problem for humanity, but the polit170 THE FREEMAN • MARCH 1996 ical and social institutions that affect human behavior. In this regard, the paternalistic welfare state is a serious problem. Govern ment programs that entitle people to con sume without their having to produce turns them into drones and parasites. Energy conservation is an important survival trait. Individuals that can obtain more goods for less cost will tend to thrive. The welfare state seduces individuals into behavior pat terns that exploit this survival trait, but at the cost of imposing extra burdens on the productive individuals. The more generous the welfare benefits, the larger the number of people that will be drawn into this para sitic mode of existence. At some point, the burden of the parasitic portion of the pop ulation may overwhelm the output capacity of the productive portion. Thus, it is the ratio of parasitic to productive individuals that is crucial, not the total size of the population.

Absent parasite-inducing paternalism, a larger population could offer significant ad vantages. More people means more minds. Having more minds working on human problems improves the chances of finding solutions. There is more opportunity for specialization and the depth of expertise that specialization brings. The dramatic ac celeration in science and technology in our high population era is evidence for the potential advantages of a growing popula tion. Erroneous premise #4: The environment is getting worse. On balance, the environment is getting better. Consider the case of transportation. The internal combustion engine is fre quently singled out as a prime culprit in the pollution of the environment. Yet, the in ternal combustion engine vehicle is clearly less polluting than the animal-powered transportation it supplanted. A horse pro duces 45 pounds of manure per day. This emission, in an urban context, typically generated a horrible smell and mess. Fur ther, it provided a breeding ground for insects, vermin, and the diseases associated with filth. In contrast, the emissions of internal combustion engine powered vehi cles pose a much smaller threat to human health.

Neither should the efficiency aspect be ignored. A gasoline powered vehicle can travel farther in one hour than a horse can in a day. Therefore, on an emissions per mile of travel basis, automobiles are less pollut ing than horses. Automotive technology has not stood still since supplanting animal-powered travel. Autos last longer, travel faster, and use less fuel per mile now than they did when first invented. In terms of pollution emitted dur ing the operation of autos, noxious emis sions per vehicle mile are down·70 percent to 95 percent since 1970. In most cities, the ambient air is cleaner now than it was 20 years ago. Erroneous premise #5: More government control is the answer. The awesome power wielded by govern ment has persuaded many that it should be the instrument of choice for dealing with environmental problems. Plausible as the resort to government's awesome powers may at first appear, experience would seem to indicate that this would be a poor choice.

The first source of difficulty for those wont to rely upon government solutions is that government is inherently irresponsible. Because government has the might to com pel compliance with its dictates, it cuts itself offfrom essential feedback on the success or failure of its efforts. Government coercion rides roughshod over differing values. Its "one-size-fits-all" standard ignores the dif fering needs of diverse individuals. The balancing of values that typically occurs in the marketplace is suppressed. In its place, costly, and frequently ineffective measures are imposed. The fact that government is funded through taxation increases the odds that government programs will fail to achieve their announced objectives. Taxes sever the link between costs and benefits. This creates a "problem of the commons." The "prob lem of the commons" is that everyone has an incentive to demand more than can be PROSPERITY WITHOUT POLLUTION 171 PUBLIC TRANSIT OPERATING RESULTS BefoJ'e arid After Federal Aid Millions of Dollars 1000 a -1000 -2000 -3000 -4000 -5000 -6000 -7000 -8000 -9000 -10000 -11000 -12000 -13000 -14000 ........

....~ .\..... .......\ .... _ Actual Total Losses State & Local Cash Flow After Federal Aid 1965 1970 1975 1980 1985 1990 Year Source: Transit Fact Book (American Public Transit Association) provided by the resources available. At the same time, no one has an incentive to provide more resources. Those who receive the benefits do not have to pay the costs. Those who pay the costs do not receive the benefits. This is the formula for failure that contributed to the demise of socialistic so cieties like the Soviet Union, East Ger many, and Poland. One of the clearest demonstrations of the' 'problem of the commons" in the Amer ican economy is in our urban transporta tion systems. Almost all of the urban transportation systems in America are op erated under conditions that could most accurately be characterized as socialistic. The roads and rails are owned and operated by government. Most of the funding comes from taxes. Decisions regarding invest ment, services, and prices are all made through a political rather than a market process.

Since they don't have to pay in proportion to the cost to obtain access to roads, drivers demand more than can be provided. High way agencies go through recurring financial crises in a futile effort to sate this demand. Meanwhile, a massive waste of precious time is underway during every' 'rush hour. " Some would have us address this waste by building heavily subsidized rail transit sys tems. However, even with two-thirds of the cost of transit trips being borne by taxpay ers, this mode has continued to lose riders. Continuing to pour more money into these transit systems is the kind of irresponsible misallocation of resources that only govern ment is prone to inflict on society. (See the chart of "Public Transit Operating Results" for an illustration of the inauspicious results of government subsidies to transit.) A second source of difficulty for those who look to government for solutions is that government planning is inherently inept.

172 THE FREEMAN • MARCH 1996 Reality is too complex to fit into any plan that government can devise. Government lacks adequate information on the subjec tive values of individuals, on the world's continuously changing circumstances, and on what the future might bring. Further, government lacks sufficient incentives to avoid mistakes. The burdens of its errors fall on others. Its failures serve as a rationale for further meddling. If granting more power to government is not the best way to achieve prosperity and reduce pollution, what is? Well, since the attainment of both prosperity and a cleaner environment is likely to hinge upon the application of human creativity to perceived problems, an obvious option would appear to be to attempt to encourage more creativ ity. Creativity is likely to be encouraged if individuals are (1)free to use their minds and (2) have sufficient incentive to do so.

This argues for reducing the scope of government intervention and control over society and increasing the scope for volun tary human interactions. Government spend ing and taxing should be reduced. The lessening burden on private transactions that would result would permit more invest ment in innovations and technological ad vancement. The lure of greater "net-of taxes" returns on investment would provide added incentive for innovations and tech nological advances. The socialistic enterprises ofgovernment, like highways and transit systems, should be privatized. Selling such operations to pri vate-sector owners would enable the pow erful forces of market incentives to more efficiently direct resources to meet consum ers' most urgent needs. More rational pric ing of services will reduce the deadweight losses epitomized by trafficjams. The fixed capacities of urban roads could be more effectively used and avert the need to pave over more of the environment.

Environmentalists urging a government mandated return to a more natural mode of livingare misperceiving the past and the true implications of "natural. "There is no "Gar den of Eden" to which humanity can return. Human creativity is the key to a more livable future in both economic and environmental terms. To foster creativity we must have freedom to think and act. D New from FEE An Endless Series of Hobgoblins: The Science and Politics of Environmental Health Scares by Eric Hagen and James Worman T he American public is constantly warned about the danger of man made chemicals. Hackneyed admonitions regarding the risk of cancer ring out when a new chemical product is introduced. Unfortunatel)', the public normally only hears one side of the story. The truth behind the scares rarely sees the light of day. In this study, Eric Hagen and James Worman examine the three major chemical scares of our time-Alar, Asbestos, and Dioxin. The authors expose the uncertainties of the risk assessments, the costly federal regulations that follow, and the dismal quality of the 1/ science" behind the hysteria. The research presented provides a gen uinely eye-opening account of the dangers of pseudo-science and environ mental alarmism.

89 pages $9.95 paperback THEFREEMAN IDEAS ON UBERTY James Madison Checks and Balances to Limit GovernmentPower by Jim Powell J ames Madison didn't originate the idea of checks and balances for limiting govern ment power, but he helped push it farther than anyone else before or since. Previous political thinkers, citing British experience, had talked about checks and balances with a monarch in the mix, but Madison helped apply the principle to a republic. Contrary to such respected thinkers as Baron de Mon tesquieu, Madison insisted checks and bal ances could help protect liberty in a large republic. If one must endure a central government, it seems hard to improve on the highly sophisticated checks and balances provided in the U.S. Constitution, which reflects a good deal of Madison' s handiwork. Stalwart republican Thomas Jefferson embraced it. He told Madison, his best friend: "I like much the general idea of framing a govern ment which should go on of itself peaceably, without needing continual recurrence to the state legislatures. I like the organization of the government into Legislative, Judiciary and Executive. I like the power given the Mr. Powell is editor ofLaissezFaire Books and a Senior Fellow at the Cato Institute. He has writtenforThe New York Times, The Wall Street Journal, Barron's, American Heritage, and more than three dozen other publications. Copyright © 1996 by Jim Powell.